Joann’s is set to close 533 of its 800 store locations after potential bidders showed no interest in the doors set to shut down.
Nicholas Haughey, a senior director with restructuring advisory firm Alvarez & Marsal North America, said in a court document that the 533 locations are “unlikely to be considered or included in any going concern bid.” He said store closing sales are expected to begin this weekend to coincide with the President’s Day holiday on Monday.
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In a separate court document, bankruptcy attorney’s for Joann’s said there could be additional stores identified for closing at a later date.
The fabric and crafts retailer filed its Chapter 11 bankruptcy petition on Jan. 15. It has since chosen Gordon Brothers Retail Partners as the “stalking horse” bidder for certain assets. The agreement with Gordon Brothers sets the base minimum for bidding in a court approved auction process. The hope is that someone will enter the bidding and provide a better offer for the benefit of creditors. Joann’s is hoping to sell its assets to a going-concern bidder that would keep stores in operation and save some jobs.
The expectation is that the future of Joann’s will be known within the next few days. A bankruptcy auction is slated for Friday.
The specialty chain previously filed for Chapter 11 in March 2024. A prepackaged deal with lenders allowed it to exit Chapter 11 one month later with all stores intact.
Retailers that enter bankruptcy for the second time are part of the so-called Chapter 22 club. In Joann’s case, the chain operates in what has been singled out as the struggling home sector.
According to data from S&P Global Market Intelligence, the elevated number of corporate bankruptcies in 2024 extended into January with 70 filings, one of which was Joann’s. Joining Joann’s in the consumer discretionary category was Surf 9 LLC, a licensed footwear and sporting manufacturer. Surf 9’s footwear division manufactures an assortment of water shoes, sandals and lifestyle footwear for both men and women. Based in Bonita Springs, Fla., the company owns the Denali Outdoors and Havasu Watersports brands. It is also the official licensee of Body Glove, Nautica, Spyder, Airwalk, and Eddie Bauer brands. The company also manufactures products for outdoor sports, including paddle boards, kayaks, surfboards and wakeboards.